Drinks industry body in plea for cut in excise duty

Bushmills Distillery is investing £60 million in new facilities
Gary McDonald Business Editor

DRINKS producers in Northern Ireland are urging new British chancellor Rishi Sunak to cut excise on alcohol sales in next week's Budget in order to sustain consumer confidence and spending patterns - and in turn ensure increasing revenue to the Exchequer.

Drinks Ireland, the all-island body representing drinks producers, distributors and brand-owners, in a submission ahead of the March 11 statement, is demanding a restructuring of the excise system.

The UK currently has the fourth highest aggregate rate of excise on alcoholic products in the EU, which puts undue pressure on small drinks producers in particular.

Around one million cases of Northern Ireland-produced spirits were sold in the UK market last year, with overall sales greater for small producers, particularly gin distilleries.

And Drinks Ireland believes a reduction is even more critical in light of the decision by the US to impose a 25 per cent tariff on Irish cream liqueur and single malt Irish whiskey produced in Northern Ireland, which impacts export opportunities and means the domestic market is even more important.

More than six million cases of Irish whiskey, Irish cream liqueur and gin were produced in Northern Ireland in 2019, some 80 per cent of which was exported to markets other than the UK or Ireland.

In its pre-budget submission, Drinks Ireland also called on the UK government to support Northern Irish export promotion.

The lobby body's director Patricia Callan said: “The drinks industry is vital for Northern Ireland's economy.

“For example, Diageo has recently invested £8 million in its Marshall's Road packaging facility while Bushmills has announced significant new investments £60 million in new distillery and maturation facilities.

“Additionally, Bushmills Distillery attracted more than 150,000 paying visitors to the Causeway Coast last year while Echlinville, Rademon Estate and the Boatyard distilleries also attract visitors, with plans for further distillery visitor experiences in Newry, Donaghadee and Crumlin Road in Belfast.

“In order to maintain growth, we're calling for an excise reduction in the next budget.

“It's been the policy of the government to increase excise duty on all alcohol by RPI at each budget

“But duty freezes in 2017 and 2018 have actually delivered higher revenues to the exchequer.? The freeze announced in 2017 was projected to cost the Exchequer £180 million in revenue, but in fact it made £380 million more from spirits alone.

“So, a restructuring of the excise system to reduce the burden of excise is not only good for consumers and the economy, but also the Exchequer.”

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